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A Review of MAXED OUT, a New Film About the Credit Industry

Maxed Out is a new film that examines the credit industry — its profitability and its effect on consumers. It’s a sort of Super Size Me, but with credit cards instead of hamburgers. Here’s the trailer:

The film discusses the role of banks, of government, and of consumers in creating an industry that is, in the words of Harvard law professor Elizabeth Warren, “obscenely profitable”. Here’s how the press kit describes the movie:

Maxed Out takes viewers on a journey deep inside the American style of debt, where things seem fine as long as the minimum monthly payment arrives on time. With coverage that spans from small American towns all the way to the White House, the film shows how the modern financial industry really works…

What I likedMaxed Out peeks into all corners of the credit industry. It shows us borrowers and lenders, payday lenders and pawnbrokers, commentators and collection agents.

We meet Chris and Bob, for example, the owners of People First, a Minneapolis debt collection agency. They claim their company takes a kinder, gentler approach, but then gleefully compare their tactics to those used by pirates. We also meet Lynn Stavert, a California woman whose husband recently died, leaving her unable to make the $4,000/month mortgage payment. (She used credit card cash advances for a while before giving up.) The various stories illustrate how our lifestyles have become thickly entangled with easy credit.

The film notes that lenders make money from poor credit risks. Banks don’t give you credit because they think you can repay it — they give you credit because they think you can’t. The film-makers follow an investigative reporter as he visits the Browns, a poor family in Aberdeen, Mississippi. John, the eldest son in the family, is 44 and severely retarded. The Browns had a low-interest government subsidized mortgage. A saleswoman from CitiFinancial convinced John to replace that loan with a longer, higher-interest product the family cannot afford. She led John to believe that the loan would benefit the family. She then helped him to sign his name to the contract in big block letters. This makes my blood boil.

Maxed Out also draws parallels between consumer debt and the debt of the United States as a nation. “Why should we live within our means when the government won’t?” the film seems to ask.

What I didn’t like
Though I liked Maxed Out, it did have some weaknesses.

There’s a lack of clear narration.

It would have been nice to have a brief historical overview of credit in the U.S.

At times, the film feels unnecessarily political.

The biggest flaw, though, is a failure to address the subject of personal responsibility. Debtors are portrayed as victims of the banking industry. While I acknowledge that the credit industry preys on the poor, there are millions of middle-class Americans in debt because of bad decisions, because of a consumeristic lifestyle. I should know — I’m one of them.

At one point, the film-makers interview Trisha and Jane, two grieving mothers from middle America. Both lost college-age children to suicide. They believe the suicides were spurred by credit card debt. The implication is that the credit card companies killed these kids. This would have been a great spot to talk about personal responsibility, but it’s an opportunity lost.

ConclusionMaxed Out should be required viewing for young adults. People often complain about the lack of financial education in our schools — this film would be enlightening for many high school and college students. After watching it twice, I’m more convinced than ever to avoid credit. When I’ve paid off my debt a year from now, I will carry my mortgage. That’s it. I’ll even try to purchase my next vehicle with cash. (This may not be feasible, but I’ll give it a shot.)

I agree 110%. In the interest of full disclosure, I work at the publishing company that published the companion book to the movie, also called Maxed Out. I had nothing to do with the development or publication of the book, and my involvement so far has only been a roundtable discussion with the author. I’ll be seeing the film tonight at it’s New York screening.

I asked him what role he felt personal responsibility plays in this situation, and he gave me a very evasive answer–he acknowledged that yes, we need to be responsible but said you can’t put a hard and fast percentage on it (which is obviously not even what I was asking for). It especially burned me up that in the book (not sure if she’s featured in the movie) a national guardsman charged a boob job and an Escalade to her government-issued credit card. How is that predatory? It’s a pity that they didn’t have checks and balances set up to prevent that type of thing but she is not a victim there–she chose to buy a fancy car and get elective surgery done, and she chose to put it on her credit card.

There’s a huge difference among people like John, who are suckered into debt they truly can’t afford, people who use credit cards as emergency funds because they’ve lost a job or had a huge medical problem, and people who get too far into debt because they don’t pay attention to their finances and run up charges supporting a lifestyle they can’t afford. Call my cynical, but I’m willing to bet that the majority falls into the third category, and you just can’t convince me that a predatory banking industry is responsible for that. That’s just plain old entitlement.

Last year my partner was working out of state. His car broke down in the middle of nowhere in Texas. He called for a tow, but his credit card was turned down. Without telling us, the company had cancelled it. The reason I was given by the credit card company? We hadn’t carried a balance in over two years. They aren’t happy with the fee they collect from the business owner, they want your money, too. If they can’t get it, they’ll leave you stranded in the desert!

“ohn, the eldest son in the family, is 44 and severely retarded. The Browns had a low-interest government subsidized mortgage. A saleswoman from CitiFinancial convinced John to replace that loan with a longer, higher-interest product the family cannot afford. She led John to believe that the loan would benefit the family. She then helped him to sign his name to the contract in big block letters.”

I don’t get it. Should his mental condition invalidate his contract? Moreover, is the title to the property in John’s name? If so, why? Shouldn’t the property be held in trust, with perhaps the oldest competent sibling as trustee? I just don’t understand how a severely retarded adult could be held to a valid contract or even be in a position to sign a valid contract.

VinTek, I had similar questions. The film is unclear on these points. It often chooses the sensational over the informational. This is another weakness.

There is a companion book to the film. The press kit included a copy, but I haven’t had a chance to read it yet. I’m hoping that the book takes a more even-handed approach, and includes more background information on people like John and his mother. (And on the woman with the $4,000 mortgage. We’re meant to feel sorry for her, but I just can’t.)

I’m very curious to see how other people react to this film. Scarfish will have to give us a review tomorrow!

“Last year my partner was working out of state. His car broke down in the middle of nowhere in Texas. He called for a tow, but his credit card was turned down. Without telling us, the company had cancelled it. The reason I was given by the credit card company? We hadn’t carried a balance in over two years. They aren’t happy with the fee they collect from the business owner, they want your money, too. If they can’t get it, they’ll leave you stranded in the desert!”

I’m 100% positive that information is included in the initial documents you received from the CC company. Even if it wasn’t their required to send you notices when your terms change. Why didn’t you read it? It’s not the CC company’s fault you can keep track of those things.

If you’re going to enter into a contract, make sure you understand the terms. Apparently, you didn’t. But, it’s sure nice to blame the “greedy corporation”, isn’t it?

My uncle is slightly retarded. He is a janitor with low income, lives on his own, and fairly capable of taking care of himself, but he has a very hard time handling and understanding money. My grandparents had helped teach him to not use debt, save his money and only use what he had. Not only it is good advice, but it was hard for him to manage debt and bills. About 5 years ago he was doing well, he had bought a mobile home for himself, easily made payments and spent most of the rest of his money on games and electronics. He also had saved up enough money to buy his own used car. In the last 5 years he had was convinced to sell his affordable house, buy a huge house, wrack up tons of credit car debt, buy a brand new car for himself and his girl friend (who is also mildly retarded). He wasn’t able to make even the first payment ontime (with the exception of the house).

My grandparents found out and are now trying to clean up the mess and reteach him. Its hard to figure out whos fault it is. He obviously made the decisions to get those loans and has proven capable of making his own decisions until then, and a part of me feels like it is his own fault and he will hopefully learn from it. Another part of me despises the lenders who convinced him that he could some how afford all this and yet another part of me despises society for convincing him that that is how you are suppose to live. It has got to be tough to be a trusting individual with limited intellect, society has no problem crushing these people and tossing them in the gutter.

You know, alot of people drive around in brand new cars when they probably shouldn’t. I see alot of billboard ads for “how to buy a Maxima when you can only afford a minima” playing on the need for people to get a really flashy new car when a used one will do.

I think it goes beyond what can be taught in school. You never really understand what a bad thing debt is almost until you are in the hole and have to get out.

I honestly think part of it comes from growing up children of the boomers. In my family, the family income was modest enough that the only time you got new toys was for christmas and your birthday, and even that was modest compared to what my friends got. And the key thing was what was bought was **only what could be paid for**.

What I didn’t understand then, and I only learned after having a ton of debt was that while we didn’t have alot of *stuff*, we also didn’t have alot of *debt*, so in many ways, we were better off, financially, than I am now.

Of course those were the days before easy credit. Going to college was the first time when I could actually buy things without working for them, and boy did I.

I blame nobody but myself. I knew debt was “bad” but the need to buy things outweighed the theory of debt being a bad thing, and there’s no way I could have learned that lesson from mere observation. I’ve since paid back most of that debt, and incurred more, and paid that back, but that lesson will be with me always and I am motivated to return to a lifestyle of ‘saving up’ for the things I want.

Thanks for the review. It sounds like the trailer pretty much does justice to the movie’s content. It’s unfortunate to hear that they focus solely on the big bad credit industry and divert the focus away from any amount of personal responsibility.

I get the feeling that the average American consumer would walk away from the movie thinking “man, somebody should really do something about all those dirty tricks the credit industry plays on innocent people” rather than “man, I should really avoid debt in my life!”

I think companies preying on the poor is wrong, but I don’t think that’s the case of most debtors. People just need to learn how to count their beans and not buy junk or commit to financial contracts that they obviously can’t pay back. The current state of financial affairs in the country is more of an indictment of low levels of personality responsibility encouraged by our consumerist culture.

About the kids that committed suicide that was blamed on credit card debt, I would be willing to bet it had more to do with mental health and less to do with the credit industry. In cases like that, anybody who’s ever studied suicide, would know that the brain is not supposed to accept killing one’s self as a proper way out of a situation. Something, most of the time, needs to be wrong to make that an acceptable option. What’s a more likely scenario, is that an underlying condition such as bipolar disorder, triggers manic shopping and reckless decisions, then once they crash and realize what’s happened they spiral further downward. Unfortunately, there’s really not much that can be done in situations like this. Unless someone neglects to take their meds, it really has nothing to do with personal responsibility, nor the predatory behaviors of the credit industry. People with certain conditions are just as likely to ruin relationships, loose jobs, get in trouble with the law, etc… , to find themselves in these types of situations. Case-in-point, if mental illness played a role in those cases, which statistically it probably did, then they should not have been used to highlight the films point. It is just one of those things that can’t really be avoided as far as credit is concerned.

I saw the film tonight and wanted to add to my two cents posted above.

First, JD and VinTek, John’s situation is explained in much more detail in the book. His mother had a low-interest government subsidized loan, which they qualified for in part because of John’s disability. A woman from their church convinced the mother to refinance to a regular mortgage promising a smaller payment (the payment is larger, the terms are longer, the interest rate is higher, and the loan is no longer subsidized). Obviously, she couldn’t qualify, so the banker was willing (wink, wink) to accept John as a cosigner. His mother had to write his name out and have John copy the letters to sign the contract. I’m not sure why their laywer (the guy who was visiting them in the film) hasn’t tried to contest this based on inability to consent or whatever the legal jargon would be for John’s disability.

Overall, I think the film is much more moving than the book, particularly the interviews with the mothers of the college students who committed suicide. The editing does a really good job of juxtaposing the credit industry (be it bankers, senators, collection agents) statements with the folks in trouble, in debt, or reeling from the effects of it in their lives.

At the roundtable following the screening (Elizabeth Warren and Janne O’Donnell were available for questions, as was James Scurlock and Kirsten Keefe, founder of Americans for Fairness in Lending), I asked what was the role of education (not necessarily the school system) to prevent this type of behavior, to teach people not only money-management skills but how to avoid being prey, and got another pat answer: that education is NOT the answer, but that predatory lending must be legislated away and only then can we begin to teach people. Trying to learn to manage one’s finances was compared with allowing food companies to use whatever pesticides they liked and then requiring consumers to read paperwork on what had been used and allow them to make their own decisions. Scurlock actually said that it’s impossible to understand the contracts that credit card companies provide to borrowers, and the entire panel seemed to agree that indeed it was pointless to try, but instead we should write our senators.

While I agree that we should cry out against unfair practices, I do feel that we owe it to people to hold them accountable. TANSTAAFL. (There Ain’t No Such Thing As A Free Lunch.) When did we forget this?

I do not understand this viewpoint. This is such a simplistic view of the problem. Our nation’s credit woes are caused by a variety of factors. Predatory lending is one, but as I’ve mentioned before, so is marketing. Would we feel compelled to spend if we weren’t exposed to advertising 24-7? And, of course, there’s personal accountability. I believe that to focus solely on predatory lending misses the point. Unless there’s more to the story, no predatory lending got Lynn Stavert into her $4,000 mortgage.

I’m all for tighter restrictions on predatory lending. I am in favor of this sort of legislation. But I think it is dishonorable to lay the blame wholly at the feet of these companies.

All that marketing, TV advertising, radio advertising, print. Personal Accountability seems to be getting unimportant these days, or in some cases even frowned on. Got to have that new toy/fast food/service is the message being pounded into people’s heads. It’s like keeping up with the Jones has now been made our national task.

Good thing that quite a few seem to resist it. I read somewhere that 60 percent or more of us no longer carry a balance on credit cards.

It’s been five years since I watched live television. Longer then that for dropping all magazine subscriptions. Finally gave up on any radio other then C-Span on XM and PBS once in a great while.

So I visit my sister and my bro-in-law once in a while, and the idiot box is babbling away in the corner. Just one “Buy this now” after another. Can’t stand it long and off to seek a spot of silence.

“All that marketing, TV advertising, radio advertising, print. Personal Accountability seems to be getting unimportant these days, or in some cases even frowned on.”

Right! And the most amazing thing is that these are consumer advocates doing the frowning–they’re practically helping the credit card companies take advantage of people by refusing to put any of the blame on individuals, even in situations like the $4,000 mortgage or an Escalade on a government credit card.

We’re not the only ones irked by the Maxed Out documentary. All Financial Matters also disliked its lack of attention to personal responsibility and found it overly politicized with, “snippets of nasty, mean Republican’s siding with credit card comp…

Not surprising that a documentary chose to expose this industry for what they are all about. When you consider that the credit card industry makes no product and offers a very limited service it is hard to consider it a business. 100% of its income is from fees and interest, our money going into their coffers.

While many people find employment within this industry, you can only imagine how their morals and values are compromised each day.

And while the benefit of obtaining money when needed is a valuable service in our day and time – it becomes quickly exploited from both sides and the quality of patience and delayed gratification have been lost.

I saw the movie on DVD earlier this year, and I completely agree with your assessment that the film fails to address personal responsibility. The movie addresses the credit crisis in a one-sided manner, painting all credit card lenders as evil and all consumers as victims. This lop-sided treatment detracts from its credibility. Frankly, I was disappointed. Had the filmmakers made a more well-rounded movie, ironically, I think it would have had a greater impact, like “Supersize Me.”

i saw the movie last night on showtime. you are right it doesn’t really address personal responsibility, but it opened my eyes to the deceitful ways of our government and the greed of money. i only have one personal debt left to pay off, and a mortgage. however, i hate that credit card more today than yesterday. if i have to eat Ramen Noodles for the next 9 months, the debt will be gone. i too, will carry my mortgage only and nothing else, but not for 30 years! debt free living is the only way to have freedom and protect yourself and your family from the madness of our money hungry government and the companies that feed them.

I was not bothered by the fact that they did not address personal responsibility, because that did not seem to me the point of the film.

It seemed to me that the film was about *predatory* lending practices which have become normalized in our society and how that has weakened society, and not about money management or traditional lending at all!

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